When you don’t want to go to court to resolve a dispute, then you should consider alternate dispute resolution (ADR). Two of the more popular forms of ADR are mediation and arbitration. They are very different, and each has different strengths and weaknesses. To help you choose between the two, you should closely consider your own needs. If you have questions, then you should contact an attorney.

Steps

Part 1

Analyzing Arbitration and Mediation

1

Identify the strengths of mediation. Mediation is a process where you and the other party to the dispute will meet with a neutral third party. This third party is called the “mediator.” The mediator is not a judge; instead, they try to get each side to listen to each other. Many people find the following to be mediation’s strengths:

It’s not adversarial. Instead, you and the other side work to reach a resolution you both can live with.

It allows for creative resolutions. For example, you might want an apology. Or you might want to have the other side offer an explanation for what happened. It is possible to obtain these kinds of resolutions in mediation.

It’s confidential. Nothing you say in mediation is revealed, either later in court or to the press.[1]

2

Consider the weaknesses of mediation. Depending on your point of view, mediation might not be the ideal method for resolving your dispute. For example, the following are features of most mediations:

It’s voluntary. You might find this to be a strength or a weakness. If you want a definite resolution to a dispute, then mediation might not provide it. In mediation, either side can stand up and end the mediation.[2]

You have to compromise. You might be focused on “winning” and having someone—say a judge—tell the other side that they were wrong. This won’t happen in mediation. If winning is important, then you might try arbitration.

You usually have to be in the same room as the other person. If you are afraid of the other party, or if you are too emotional, then mediation is probably not effective.

Mediation doesn’t typically have a “discovery” process where you can request information from the other side. Accordingly, you shouldn’t choose mediation if you are unsure of exactly what happened.

3

Understand the strengths of arbitration. Arbitration is more like a trial. You and the other side present evidence and witnesses, and the arbitrator decides who wins the case. The arbitrator can award an amount of money to the winning party. Arbitration has a reputation for the following:

It’s confidential. Like mediation, what happens in arbitration is not revealed publicly.

Arbitration is a formal process. If you’re afraid of the other side, then you might find safety in the formality.

You can win. You don’t need to compromise in arbitration. Instead, you can make a demand for money compensation, and if you prove your case then the arbitrator will award you a sum of money.

It is usually binding.[3] The arbitrator’s decision has the same effect as a judge’s decision.

There is usually a limited discovery process. Although not as extensive as in a lawsuit, arbitration allows for discovery. You can request documents from the other side and potentially have witnesses answer questions under oath before the arbitration begins. Discovery is a good way to uncover the full extent of the other side’s wrongdoing.

4

Analyze the weaknesses of arbitration. Arbitration isn’t right for everyone. It has some common features that you should be aware of before choosing between it and mediation. For example, consider the following:

You might need a lawyer to put on your most effective case. You can also use a lawyer in mediation. However, because mediation is not adversarial, there is less need for one.

It might be a lengthy process. Arbitration has a reputation for being a faster alternative to a trial. However, arbitration has steadily become a slower process over the years. It will probably be much slower than mediation.[4]

You could lose. If you are the defendant in a high-stakes dispute, then going to arbitration and losing is the same as losing in court. If you mediate the dispute, then you can reduce the amount of money you have to pay to the other side.

5

Compare costs. Costs are probably a concern for most people. Both mediation and arbitration are generally cheaper than a lawsuit in court. However, they might have different costs, depending on your situation. You should try to estimate the costs before choosing between the two.

If the court or bar association offers mediation or arbitration services, then you should call them up and check how much each generally costs.

You can hire mediators by the hour. Generally, they charge $70-400 an hour.[5] You can call up a mediator and explain your dispute. Ask the mediator to estimate how long they think it will take to resolve the issue.

You can get an estimate for the costs of arbitration by talking to someone who has arbitrated a similar dispute.

Part 2

Choosing Between Mediation and Arbitration

1

Identify your priorities. Before you can properly choose between mediation and arbitration, you need to understand what is important to you. Give some time to thinking about the following, and rank them in importance:

How important is it for you not to have to testify or be cross-examined? Many people find any kind of dispute stressful, and arbitration could be more stressful than mediation.[6]

Do you just want money or do you want an apology also? Because of its flexibility, mediation might be a better option if you want something other than money.

Are you unsure about what you want? In this situation, voluntary mediation is a better choice than binding arbitration because you can stop the mediation process at any time.

Do you want the dispute resolved with as little hassle as possible? If so, mediation is a good bet. The mediator will help guide discussion, keep everyone on track, and help draft a settlement agreement if the mediation is successful.

Are you risk-averse and afraid of losing? If so, then mediation is the better choice.

2

Analyze how committed you are to compromise. You might think mediation is the better choice because it is often cheaper and less adversarial. However, mediation will not be successful unless you are committed to making the process work.[7] In fact, mediation will be a disaster if you aren’t willing to compromise.

Be honest with yourself. Not everyone wants to compromise and resolve the dispute in a friendly manner. If someone has wronged you terribly, then you probably won’t be committed to mediation.

Nevertheless, you can always have a lawyer try to negotiate a settlement. If your case is strong, then the settlement amount might be close to what you are asking for in a lawsuit.

3

Check how much money you have. You shouldn’t pick a dispute resolution technique if you can’t afford it. Analyze whether you have the money to go through with either mediation or arbitration.

4

Consider your relationship with the other side. If you want to continue working with the other side, then mediation will be the better option for you. Because mediation isn’t confrontational, you can leave the process with your relationship intact.[8]

However, arbitration might be an acceptable option if you never plan on seeing or doing business with the other side again.

5

Analyze the strength of your case. You might have an airtight case. In this situation, arbitration might make more sense since you can win and won’t have to compromise. You should analyze your evidence as honestly as possible.

An arbitrator, like a judge, focuses on the law.[9] You should research the law that will be used in your case. For example, if you are suing for medical malpractice, then you can read court opinions from your state on Google Scholar.[10] Read relevant opinions to find out what proof you will need to win your case.

You can also ask an attorney to neutrally evaluate your evidence and explain whether you are likely to win under the law.

6

Meet with an attorney. You may still be confused about whether to pick mediation or arbitration. If so, then you should get a referral to an attorney and schedule a consultation. You can get a referral from your local or state bar association.[11]

At your consultation, you should talk generally with the lawyer about your dispute and about what is important to you. The lawyer can then help you decide whether arbitration or mediation is better for you.

Part 3

Starting the Process

1

Find a mediator. You can find mediators in a variety of places. For example, your local courthouse might keep a list of court-approved mediators. You can also find mediators in the following places:[12]

Your local bar association. Many attorneys are also mediators. You can get a referral to someone by contacting the bar association.

A community mediation center. Stop into your town office and ask if anything is available.

Online. You can search for mediators in your city or state by doing a general Internet search.

Private mediation centers. Some of the larger include the American Arbitration Association, JAMS/ENDISPUTE, and Judicate.

2

Research the mediator’s background. You and the other party should agree to the mediator. Ask for the mediator’s background information, such as experience or a resume. Share this information with the other side and make sure you both agree before hiring the person.

Remember to get a quote for the mediator’s hourly fee.

3

Decide what kinds of arbitrators you want. Arbitrators come in many shapes and sizes. For example, you can get an arbitrator who is a specialist in the subject matter of the dispute. For example, if you have a construction dispute, then you can find an arbitrator who has experience as an architect or engineer.[13]

You can also have a panel of three arbitrators (though this costs more). For example, you could pick one arbitrator and your opponent could pick one. Then the two arbitrators will choose the third arbitrator.

4

Find an arbitrator. There are many independent arbitrators, who may have been former judges or current lawyers. There are also many national and international agencies that offer arbitration services.

However, you might have already agreed to work with a particular arbitrator. For example, many commercial contracts contain an arbitration clause. This clause might state that you agree to use an arbitrator from a certain arbitration association, such as JAMS or the American Arbitration Association. Read your contract to see if you have agreed to work with a certain association.

If the contract doesn’t mention a particular arbitration association, then you can pick your own.[14]